Access to high-speed communications is becoming increasingly important for
business and consumers. But some people, including Governor Jesse Ventura, say the
state's laws governing telephone and cable television companies are badly out of
date. That's why the Legislature is considering competing proposals aimed at
bringing Minnesotans lower prices and more services.

IT'S FAR FROM CERTAIN ANY
of four bills on offer will become law this year. Not
only are competing interest groups gearing up to influence the legislative
process, state lawmakers are also struggling to draft language adequate to the
highly technical subject matter.

Taken as a whole, the dueling proposals would dramatically change the way the
state regulates telephone and cable companies. But basic questions remain
such as, would phone bills go up or down if any bill passed. Another unknown
is how much access for rural residents would be improved, as the legislation
intends.

DFL Senator Steve Kelley wrote one bill that would remove many existing controls
on telecom firms. He believes if companies are allowed to compete, the result
will be lower prices and added services.

Kelley: We have to create those opportunities. And I've come to the
conclusion that to create them we need to deregulate. Because I don't think
there's a state regulator who is smart enough to anticipate all these changes in
the marketplace and bring them about through the regulatory process.

"We don't want to be an area that in the extreme would be a kind of a digital
desert in the north of the country."

- Milda Hedblom

It's not only the market that's changing. A technological revolution is putting
phone, cable and even energy companies on a collision course, as they compete to
offer the same services to consumers.

Supporters of revamping the telecommunications laws say not acting raises the
danger Minnesota could be left behind.

Milda Hedblom is a senior associate at the Humphrey Institute's State and Local
Policy Program.

Hedblom: Minnesota's going to have some good things happen in telecom information
development because there's such a strong upsurge everywhere. But we should want
be in a place where digital things happen because the laws are in place, the
environment draws digital development. And right now that's not the case. I mean
we don't want to be an area that in the extreme would be a kind of a digital
desert in the north of the country.

Hedblom and others say they're concerned the current regulatory structure will
not encourage companies to make the huge investments necessary.

And even if they do, will services be fairly distributed to all Minnesotans?
According to one estimate, more than a third of the state's rural communities
will have no access to high-speed Internet access by next year. Governor Ventura
has made reforming the state's telecommunications system a priority of his
administration. Touring Greater Minnesota last month, he spoke of the importance
of bringing sophisticated services to rural communities.

Ventura: For industry to locate out in greater Minnesota they must have that
telecommunications available to them, and so that's high on our list.

Three of the four bills under consideration would alter the current system of
subsidies which enable rural residents to pay far less than the actual cost of
providing service. Funds for the subsidy, which totals some $500 million
a year, come from little-noticed fees consumers pay with their phone
bills.

To generate the same amount of money, The Ventura administration's and Kelley's
bills propose a levy on telephone, cable television, and Internet services.
Senator Kelley.

Kelley: Any telco company is going to be sending bits of data down the wire. And my view
is that we ought to be treating any company that's moving bits the same because
if government regulates them differently, then we're giving one technology an
advantage over another, and we don't know whether one technology, if any, should
have an advantage in the marketplace.

He points out that cable TV companies already offer telephone service, and a
Northern States Power subsidiary is providing high-speed Internet access.

Legislators may combine the four bills into one for consideration before the end
of the session in April, or they could end up putting off action until next
year.
What's certain is that the longer they wait, the more archaic will laws now on
the books become.